COTA paid $162,850 in IRS penalties for late payroll taxes over three years

The Central Ohio Transit Authority had to pay $162,850 in penalties to the IRS for late payroll tax payments for tax years 2019, 2020 and 2021.

What COTA spent on the penalties could pay for three new COTA drivers; the starting salary for a driver is $45,219 a year ($21.74 an hour).

COTA officials said $500,000 in federal fuel tax credits offset those penalties, but acknowledged that money could have been used for something else.

The problems began when COTA went to a new payroll system in 2019.

"It did not go well," said Erin Delffs, COTA's chief financial officer, who was named to that position in 2022. "COTA erred on the side of getting people paid, and basically reconciled taxes and deductions on the back end. There were delays in getting money to the IRS."

COTA has since changed processes and personnel, he said.

The second problem happened when payroll taxes were sent a day late, Delffs said. Now, taxes are sent two days ahead of when they are due, he said.

"We haven't had a penalty since mid-2021," Delffs said. "We've corrected the process."

Jarvis Williams, president of Transport Workers Union Local 208, which represents COTA emplolyees, wasn't aware that the transit agency had to pay IRS tax penalties.

"That's a whole lot of money," Williams said, although he also called it a drop in the bucket for COTA, which has an annual operating budget of $189.5 million.

Williams said he doesn't think anyone will get in trouble "for that mishap."

Craig Treneff, a Westerville lawyer who chairs COTA's board of directors, said the problems leading to the penalties were resolved in 2021.

"This appears to be an aberration," Treneff said.

"There was a change of software, and people who should have caught the notices, did not," he said.

In charge at the time was Angel Mumma, who was COTA's chief financial officer until she joined the Columbus Zoo and Aquarium in May 2022 when she took the position of senior vice president of finance.

"She was part of the solution, not the problem," Treneff said.

The Dispatch called Mumma, who said she would respond later.

When COTA was hacked on Dec. 12, it took all of the transit agency's IT systems offline. That led to paper paychecks for about 20 people over two pay periods, Delffs said.

mferench@dispatch.com

@MarkFerenchik

This article originally appeared on The Columbus Dispatch: COTA paid $162,850 for late payroll taxes for three years